Well, this is weird, I was trying to have a Facebook discussion on my own page, and the system will not allow me to say anything, so I thought I might as well put it here for lack of a better place.
A friend asked this:
As I understand it, thinking requires rationale whereas belief does not. You’ve seen the debt numbers, and you know that we’ve been at war for over 13 years, the US dollar is collapsing, the US society is collapsing, and much more is happening too. I think the meltdown could be catalyzed any day. Why do you think the collapse is not imminent?
So here was my attempted reply.
I think what props us up is simply the relativism of collapse. If we are collapsing at more or less the same rate as the countries we deal with, and if our collapses are mutually linked, then the purchasing power stays relatively the same, thus creating the appearance of continuity. The dollar is only as “worthless” as the other worthless currencies. Confidence in it is similarly relative.
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For some time, I’ve wondered what prevents the awful, total collapse that so many of my friends predict. Many but not all; a lot of people I know think the “imminent collapse” people are paranoid and even loony. And of course, they have been predicting this for many years, so even if they are right “this time,” the whole meme takes on a “boy who cried wolf” flavor, which means it will be disregarded even if this time it shouldn’t be.
But I do think it is an error to look at the United States in isolation in raising these legitimate questions.
MORE: Here’s a CNBC report of what happened on Facebook this morning.
Comments
8 responses to “No Collapse at Facebook!”
I would agee.
The U.S. economy has deterioriated from the strongest economy on the globe, but it is still the “least worst.” Thus, it still attracts investment currency.
The related concern here is that, once again, there is talk of the U.S. dollar ceasing to serve as the world’s reserve currency. If not the U.S. dollar then what? The yuan (renminbi) which is controlled by mercurial govt fiat rather than any market? While some would argue that the German economy is stronger than the U.S. economy, who would trust the Euro as a reserve currency with it’s underlying and fractious muti-national problems unresolved? Even if they did, the economy (economies?) participating in the Euro are simply too fiscally small to served as a benchmark for global trade. Likewise the Swiss franc. By default, the U.S. dollar (and the U.S. market) remains the destination of choice for now.
Yup, we’re one of the least screwed countries in the world. That’s why China’s repeated calls for another international currency are so stupid, people didn’t say, “Hey, let’s make the dollar our int’l currency”, it happened because it’s the most stable.
If another currency takes over, it’ll have to be German and most definitely not some commie craphole like China that needs a billion serfs to maintain a couple hundred million in marginal standard of living.
Another data point is that Rome didn’t fall in a day, it takes a while and we’re so darn powerful that inertia will keep us going long after hope is lost.
Look at the collapse of the USSR, it was looking strong right until the day they couldn’t pay their bills and it all collapsed in a day. One day we woke up and it was gone.
They were using cooked books and wishful thinking much as we are now.
We too have a bunch of career politicians who have never had to accept reality, they really just don’t understand how the world works, all they know is that America is going to last forever. They’re the epitome of the “I can’t be overdrawn, I still have checks!” frame of mine.
Personally, I liken us to the fall of many empires as their bureaucracies grew and grew until it made doing anything they didn’t want impossible.
The Byzantine Empire is the one I think most resembles us, they were arguing over stupid crap because the ‘barbarians’ couldn’t hurt them.
Like our fine Democrat betters, they see their domestic opponents as ‘enemies’ and the foreign enemies as stooges to use to continue their power.
When the fall happens, it’s going to surprise everyone and, I think, those states that have the fewest dependent on the gov’t will do the best.
The northeast and most of California will be screwed as well as urban areas in most states.
People who’ve been told their whole lives that others owe them free stuff are not going to take the loss of that free stuff well and they’ll have plenty of pols blaming it on me.
Heck, we’re not screwed now and look at the vicious attacks and vitriol directed toward tea partiers who just want fiscal responsibility.
Veeshir,
“I can’t be overdrawn, I still have checks!”
Hadn’t heard that before–great! I suspect you can find that in any dictionary as the definition of “Congress.”
“I liken us to the fall of many empires as their bureaucracies grew and grew until it made doing anything they didn’t want impossible.”
AS the bureaucracy grows the entire system becomes top-heavy. This is what happened to the baby boomers v. social security (too many dependent outflows, too few workers paying in), welfare (the same), and just the sheer number of federal employes v. the private sector (too many employees drawing tax-funded paychecks, not enough private sector workers paying the tax).
Recently I happened to hear Lou Dobbs commenting that the govt’s solution to the doctor shortage was to hire more IRS agents to enforce healthcare. (It is to weep.)
The heavier the top, the more likely it is that the stem will break; neither the physical nor the bureaucratic world is immune. Gravity always wins!
I like Lou Dobbs, his delivery is about as boring as can be, but what he says is usually spot on and he very rarely lets his preconceptions taint his conclusions.
The govt’s solution to everything is more bureaucrats.
And a bureaucracy expands beyond the ability of the system to support.
That’s why I propose a new cabinet-level bureaucracy.
The Dept of Redundancy Bureau. Its job is to trim other bureaucracies.
That’s one bureaucracy that I wouldn’t mind getting huge.
Reminds me of that old saw: “Economists have correctly predicted 9 out of the last 5 recessions.”
Veeshir,
There is hidden in this discussion of growing bureaucracy an interesting issue. Although I am no Hillary Clinton fan, one of the criticisms against her senate career is that she sponsored no substantial legislation; a complaint leveled against many sitting legislators.
So we complain about too much bureaucracy cause by too many laws and regulations, but we fault our legislators for not passing enough new legislation. Are we nuts?
Veeshir –
Personally, I liken us to the fall of many empires as their bureaucracies grew and grew until it made doing anything they didn’t want impossible.
Maybe it’s the Law of Diminishing Returns played out on a grand scale. Cost can also be measured in terms of opportunity cost. In this case the law also applies to societies – the opportunity cost of producing a single unit of a good generally increases as a society attempts to produce more of that good.
http://en.wikipedia.org/wiki/Diminishing_returns
The Federal Reserve prints $85 billion a month with a sizable amount going to buy government bonds, while the government borrows billions more from foreign governments and private investors, in a vain attempt to “create” jobs & pay current bills. All the while this is producing the opposite effect as businesses hunker down and individuals hoard or “go Galt.”
An interesting Surrealist painting, Diminishing Returns by Ayn Rand’s husband, Frank O’Connor, captures it.
http://www.objectivistliving.com/forums/?showtopic=141
I imagine the blind wooden manikin as a metaphor symbolizing government, and the Christmas ornaments being tossed and broken its silly attempt at production.
That’s a depressingly accurate description of that painting.